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Dust off your calculators, because beloved economic policy wonk Brian Riedl is back on The ...

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Dust off your calculators, because beloved economic policy wonk Brian Riedl is back on The Remnant to discuss everything you’ve ever wanted to know about the federal budget, spending, taxes, and deficits. He also touches on the right’s curious lurch toward industrial policy and common good capitalism, and why conservatives and progressives alike can’t resist the prospect of a free lunch. Is the Laffer Curve a force for evil? How progressive is the U.S. tax code? And why is Joe Biden so determined to outspend Mack the Knife? 

Show Notes:

–Brian’s page at the Manhattan Institute

–Brian’s previous Remnant appearance

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  1. Avatar photo
    Ralph Alderson

    Over an hour of great discussion on the biggest challenge facing this country was drowned out completely by the final 20 seconds: an ad for the AIR Equity project. You've got to be kidding me - do you believe what you say or not? "Equity" should have been enough to tell you this wasn't a smart move.

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  2. Donnchaoe

    This was good stuff but I thought that Riedl was weak in his opposition to a European style VAT (I'm in Ireland fwiw with 21% VAT but also v progressive income tax like USA).

    He didn't seem to have any rationale in opposing it other than that he found a 20% rate somewhat icky.

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  3. Craig Owen

    Good discussion that most people will not hear, or care to hear. But the taxman is coming for you "middle class". Jonah's favorite whipping boy JD Vance takes another lashing...even though he doesn't hold a public office.

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    Belt

    I've been saying this for years: "Something desperately needs to be done; nothing will be done." "What we need, we can't get." "There is no feasible path to get to a solution."

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  5. eoncarlyle

    I'm in my mid-twenties, not only do I have to worry about the crushing national debt that Riedl explains so well here, but also global warming-induced costs to the national economy. I'm increasingly worried that when my cohort reaches peak earning potential we'll be hit with lower services and much higher taxes to pay off the debt.

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    Ben Connelly

    Enjoyed this podcast but I’m not sure I want to think about the conclusion. The best case scenario doesn’t seem likely and the worst case scenario seems likelier every day. What are the chances policy makers actually listen to people like Brian?

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  7. Andrew Corbin

    One thing that wasn’t really discussed during the podcast which is a critical point in talking about the distribution of tax is that the distribution of income has also shifted dramatically during the same period with the heaviest tax payers growing their share of total income at an even higher rate (top 1% growing from ~5% to ~25% of all income from 1970 to 2020)

    Part of the reason Europe doesn’t rely on such a progressive system as in the US is they tend to have a much more equal distribution of pre-tax income than the US which now has essentially the same distribution as we had at the end of the gilded age (just before the Great Depression).

    Your point about needing a middle class in order to ensure democracy is right, I’m just not sure it’s the rich that need protecting. Illiberal left (Communism, get the money for the people) and illiberal right (Fascism/right authoritarianism, protect the rich from the people) both seem more likely when we’ve got such a divide.

    Note, I don’t have a good neo-liberal solution to this problem, just to point out these factors need to be taken into account when talking about how “the bottom 50% doesn’t pay it’s fair share” which seemed to be implied.

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      Adam Z

      Fantastic point. That's where my train leaves the tracks as well. It is easier to get worked up (for or against) the progressive nature of US's tax structure if the net benefit was somehow that tax was in fact disincentivizing wealth creation. That certainly seems not to be the case. A more equal tax distribution that comes paired with a more equal income distribution would certainly be preferred over today's out of balance distribution of both.

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        Probably Wrong

        The number of people getting morally worked up about the unfairness of the poor not paying their fair share seems to be a rounding error.

        The number of ignorant people morally worked up about the unfairness of the rich not paying their fair share seems to be approximately all of Twitter and cable news.

        So even though Goldberg didn’t actually make a case for getting worked up one way or another, their argument is an effective counter to the median worked-up person’s incorrect claims.

        He did make a pragmatic case for preventing an adverse impact on wealth creation. You say that it doesn’t *seem* to be the case that economic growth is impaired by our current tax policy, but how would you or I or anyone else know about the business that never was? “Seeming” impressions can only derive from our personal anecdata, and that will necessarily be biased against alternative possibilities.

        Instead we should consider the historical data indicating that publicly held debt sandbags GDP and investment. Despite some demagoguery to the contrary that is abroad, these are not far-off abstractions but an aggregate of the whole economic life of the country, affecting the lives of many more working class people than rich people, the former of which have fewer backup plans guarding against harm done to their economic prospects by external forces.

        So, we return to Jonah’s contention - maybe a less progressive tax system increases the public’s responsibility and thus reduces irresponsibly high debt, thus promoting GDP growth and harming wealth creation less. Maybe it does do that, maybe it doesn’t, but you should at least note that the argument being made IS a pragmatic one about trying to improve the economic prospects of the citizenry by increasing the responsibility of public officials and their voters.

        It’s also worth asking where you get the sense that the income distribution is out of balance - are you looking at the outrage-inducing Twitter graph that considers income, or the boring one that factors in benefits and distributions?

        (Source: https://www.cato.org/commentary/lies-damned-lies-inequality-statistics)

        I have no inherent objection to a more equal distribution of wealth, just as I have no inherent objection to higher taxes on the rich, if either one can be justified as improving economic conditions for all. But if the sense that wealth or taxation are unusually unequal in favor of the rich as things stand today is wrong or even backwards, that is something to keep in mind when we talk about addressing our current budget problems.

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    T.K. Small

    I forwarded the link to this podcast to a card-carrying progressive friend in Austin Texas and she is thoroughly annoyed… Thank you for the new material!

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      Probably Wrong

      Who issues the cards for these things anyway?

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      Anne W (Raw5254)

      The truth hurts!

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    Adicesa14

    This was an excellent, albeit depressing, discussion of the National fiscal ‘train wreck.’ It’s discouraging that our politicians are not interested in responsible spending. The looming interest rate problem is particularly ominous. Raising taxes to pay down the debt makes sense but it’s impossible to believe D.C. wouldn’t just spend more, illustrated by the current Congressional insanity. The nature of the problem is our politicians are most interested in attracting voters by providing ‘goodies,’ and the voters are addicted to those ‘goodies.’

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  10. Mike Darnell

    Bye gold!

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